Chrysler and General Motors Closing Down Nearly 2,000 Dealerships; Changing How You're Billed By Credit Card Companies; How New Grads Should Land Their First Job; How to Do What You Love and Get Paid For It

Aired May 17, 2009 - 15:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ALI VELSHI, CNN HOST: President Obama's cross country commencement tour includes weekend stops at Notre Dame. This next generation has just a few questions for the president, namely where am I going to get a job and how am I going to get out of debt.

I'm Ali Velshi. Welcome to YOUR MONEY.

CHRISTINE ROMANS, CNN HOST: I'm Christine Romans. First up for this president, changing how you are billed by your credit card companies. Credit is at the heart of the current crises, with average Americans joining Washington and living beyond their means.

VELSHI: So many young people are entering a remarkably uncertain job market. We're going to have the keys to making sure the new grad in your life is at the head of their class when it comes to landing their first job.

ROMANS: Then for the young and the old. Find out how to do what you love and get paid for it, even now. Even in the recession.

VELSHI: Like we do.

ROMANS: Doing what you love and getting money for it.

VELSHI: But first, there's devastating news for the American auto industry affecting every state in the country, between Chrysler and General Motors nearly 2,000 dealerships are going to close.

ROMANS: And General Motors could soon join Chrysler in bankruptcy with a June 1st deadline with the government looming. Peter Valdes-Dapena covers the auto industry for CNNMONEY.com. You know you guys this is such a devastating story all of these dealers closing. From the local softball league sponsors, to these are household names in many communities.

VELSHI: People advertise in the local newspapers and on television.

ROMANS: A lot of jobs will be affected from people who help with the insurance payments and all different kinds of jobs, not just sort of the idea that you have of the guy or the woman selling you the car.

VELSHI: Yeah. ROMANS: Peter, tell us a little bit about what we're seeing here. This is kind of a moment in history. We are shrinking the car dealers in this country. It's going to affect every single community almost.

PETER VALDES-DAPENA, SENIOR WRITER, CNNMONEY.COM: Well, what we're seeing here and by the way, there is one state that's unaffected and that's Alaska. Chrysler has not cut any Alaska dealers.

ROMANS: Well, there you go. Alaska has escaped the dealer meltdown.

VALDES-DAPENA: The one place.

But that goes to basically what's happening here is in metro areas and in the big cities especially, GM and Chrysler and Ford, for that matter, which isn't involved in this round of cuts, have been trying for a long time to cut down on the number of dealerships they have in those areas because those dealership networks they have, they grew up before the 1950s in many cases at a time when import cars were a novelty.

I mean, was there no Toyota, there was no Honda. It was just the Detroit big three battling it out with each other and you could support these big dealership networks in those states for many, many years, but now with a smaller share of the market they can't. But you have to remember these are independent businesses, they're not owned by GM, they are not owned by Chrysler, they're independent businesses that have contracts that are actually protected by very strong franchise laws in each of the 50 states.

So they can't ordinarily just go and say we want to let you go. They can't just do that, but the prospect of bankruptcy and actual bankruptcy in the case of Chrysler is what gives them the opportunity here to just wholesale go through and just say we're going to do it and we're going to do it now and it will be like ripping off a band- aid and we are going to take all these dealers out at the same time.

ROMANS: This is exhibit A, from the Chrysler bankruptcy filing Ali, and I was so interested that it is 42 pages long, single spaced and all of these dealers. This is how you quantify 789 dealers that will be losing their affiliation with Chrysler.

VELSHI: Remember, there are GM dealers, too, but if you look at the map of the United States and we'll show you how many per state and you will notice that those states that have larger populations have more dealerships closing, in red, 40 or more dealerships closing, in Illinois, Texas, Pennsylvania has them, Ohio has them and then you see in the deeper orange, 25 to 40 dealerships per state like California, for instance, and New York and Michigan and then lower than that. So, you know, smaller states are less populous states have fewer dealerships.

ROMANS: And dot com, which is an incredible resource for the auto industry says frankly that about 38,000 jobs will be lost. Peter, you make a good point. You say that some of these jobs are actually in demand, some of these people, at least, will be able to find new jobs.

VALDES-DAPENA: It's kind of hard to say exactly how many jobs will be lost. For one thing many of the dealerships also operate competing franchises. Many of then are actually, the Chrysler dealers that are closing, at least -- many of them are primarily used car dealers that sell many more used cars than they sell new Chryslers so they'll still have that business.

But also many jobs at an auto dealership, particularly tech jobs or auto mechanics are in pretty good demand and they've been in fairly strong demand all along. When I went to a Chevrolet dealer a couple of months ago that was closing just because of the bad business environment which many are, he told me almost 100 percent of his technicians had found jobs at other dealerships in the area.

ROMANS: That is great news.

VELSHI: That would make sense in an environment where we're not spending as much money on new cars, more used cars may be sold, the more people will be repairing their cars so there should be more work for mechanics, more so than in the past.

VALDES-DAPENA: Right. That's been a strong area to begin with anyway just because a lot of people in today's world with the knowledge of the industry out there, people often forget about these jobs that require you to get your hands dirty and so there's less people out there trying to get them even though they're good paying, secure jobs.

ROMANS: We have a camera crew and a producer and team at one of these dealers this weekend and they were asked, you know, can we hold off a little bit on the live shot because we've got to call mom and tell her this happened. This is what it's like in so many different communities.

VELSHI: There are so many small towns.

ROMANS: Do you think you're on their list and the voices break. We don't know yet. We just don't know yet. These are middle-class jobs ...

VELSHI: And there are central businesses to so many small and medium-sized towns across America. You go in and you know there's always going to be a car dealership somewhere. The whole auto industry, as you like to point out, has been so central to industry in America and so central to business and commerce. So it is a turning point.

ROMANS: Peter, so many of these, just quickly wrap up for us, so many of these closings. Do you think we're at the end of all of the pain for the auto industry or is this still a long process for auto workers and car consumers and the American auto industry?

VALDES-DAPENA: No. Unfortunately, we're not at the end of this yet. Chrysler, even as it emerges from bankruptcy and hopefully they can do that reasonably quickly, they still have a long road back to full health ahead of them.

So it's certainly not over there. GM is in somewhat better shape as they have a long road ahead of them and they will yet declare bankruptcy some time in the coming weeks as well so we could see more things happening there. These dealership cuts will go a long way to right sizing the dealership networks and in a way for those dealers that survive, it is good news for them that while it's very bad news for those being cut.

VELSHI: Peter, good to see you. Peter Valdes-Dapena he follows the story closely for CNNMONEY.com if you want to know any thing about what's going on in the auto industry, check in to CNNMONEY.com and Peter's columns and reports.

ROMANS: OK. How you and the way you feel, that's right, our emotions, how the way we feel can drive our economic recovery.

(COMMERCIAL BREAK)

VELSHI: President Obama made it clear to Congress that he wants a credit card reform bill signed into law by Memorial Day.

ROMANS: And the president is continuing to target credit card companies at a town hall meeting in New Mexico this week.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These practices, they've only grown worse in the midst of this recession when hardworking Americans can afford them least. Now fees silently appear payment deadlines suddenly move. Millions of card holders have seen their interest rates jump in the past six months. You should not have to worry that when you sign up for a credit card, you're signing away all your rights. You shouldn't need a magnifying glass or a law degree to read the fine print that sometimes don't even appear to be written in English or Spanish.

(END VIDEO CLIP)

VELSHI: We're joined now by Robert Manning, he's the author of "Credit Card Nation." Robert good to see you again. Thanks so much for being with us.

ROMANS: Hi, Robert.

ROBERT MANNING, AUTHOR, "CREDIT CARD NATION:" Always a pleasure.

VELSHI: Let's talk a little about what the president is talking about and what this legislation could hold. It involves no fee hikes for being late on other bills, not the one you're paying right now. No fees for making payments by phone and making it tougher for young people to get credit cards. Let's get your comments on that to start with.

MANNING: Well remember the president is honoring his commitment during the campaign that reforming the credit card industry was a top priority. Americans have never been more dependent on consumer credit and the key here is to emphasize the disclosure is to make sure that Americans understand the rules that they're paying with the banks and clearly the most important issue is this unilateral raising of interest rates for no reason in terms of your behavior on that particular bank account. That's the starting point here is making sure that Americans understand how much the cost of their credit is going to be.

ROMANS: We know that some of these practices are pretty egregious, quite frankly, and many of the banks say they have already stopped some of these practices and you point out that this legislation gives them an awful long time about a year to actually have to end some of the things that consumers have been complaining about for some time.

MANNING: Right. We need to restore consumer confidence and right now, if we can't generate more jobs as we're seeing with the restructuring of the automobile industry, we need to make sure that Americans have credit as their financial safety net and what we're seeing right now is with the $160 billion in TARP Funds going to the credit card industry, the access to the guaranteed liquidity fund and then the cost of funds right now at near zero, banks are actually raising their interest rates when the costs of doing business has never been lower.

ROMANS: You know, Robert, here's the conundrum, though. The banks are facing huge potential losses because of defaults on credit cards, so they're getting hurt on that end and on the other end, we have to rely on these credit cards and people have to rely on them more and more living paycheck to paycheck and they're just trying to get by. I mean, we have really because of our love and hunger for credit, put ourselves in a very difficult position here, haven't we?

MANNING: Well, there's no question about it and that's why this is a crucial transition period. Restoring consumer confidence, getting access to purchasing power to consumers that are just squeezed to their limit right now and banks that are only in business because of government subsidies and loans means that we all have to work together to get through this difficult period and raising interest rates and cutting lines of credit and not offering clear disclosure means that consumers when they're uncertain are just simply going to pass that and not buy.

VELSHI: Listen, I am with you. I think that is a lot of stuff that appears unfair. We hear a lot of it and we get it on the radio show and we really hear from people who feel that the banks have been unfair. I do worry that we're getting too far away from personal responsibility on this, while it may not have been clear it was all written. It is the same as mortgages. There's no reason to not know of what the rules are so I would be in support of very, very clear disclosure and forcing the banks to do that, but I just think we have to remember, that we as consumers are major contributors to this credit crises.

MANNING: Well, there's no question here that this is the era of financial and individual responsibility and accountability and it's going to go both sides and Congress now is going to swing the pendulum now where consumers are going to step up and be told now there's no excuse not to know the terms of your contract and you should respond accordingly.

VELSHI: Robert, good to talk to you. Thank you so much.

Now the U.S. economy is based on people's willingness to spend money, more so than any other economy in the world. So until consumers re-engage with this economy and start buying businesses are not going to start reinvesting and jobs are not going to be created again.

ROMANS: That is right. It doesn't seem to be lost on the Obama administration which has been making an effort to talk up the economy. Glimmers of hope was the phrase a few weeks ago. The idea is that Americans attitudes can literary speed up an economy.

VELSHI: And they can speed up with a decent into recession.

ROMANS: That's right.

VELSHI: Yale economics professor Robert Shiller is the chief economist at Macro Markets LLC and he is the co-author of many fascinating books including one called "Animal Spirits." Robert good to see again, thank you for being with us.

ROBERT SHILLER, CHIEF ECONOMIST, MACRO MARKETS LLC: Good morning.

VELSHI: Tell me what your theory is on this one, that we don't necessarily react to the data that is out there, the glimmers of hope that Christine and I have been talking about, but in fact, something else.

SHILLER: It's all about what really got us into this mess or got us into other analogous messes that we've seen in history. What drives the economy? That's been, surprisingly, slow to be answered by economists or that you have wrong answers, they'll say it was the Central Bank, or the Federal Reserve that did it but what we believe, George and I built a case that what changes that drives economic ups and downs are really in people's minds.

That's kind of paradoxical; it's not the mainstream wisdom.

ROMANS: And that's why it is so difficult to predict what is going to happen next because it's human behavior and human psychology that doesn't have a number on it. We talked about trying to inject confidence back into the market but we don't know what is going to bring exactly that confidence. The book is called "Animal Spirits" and we talk about the market all of the time. What are the animal spirits?

SHILLER: This talks about how much the markets have recovered since March 9, the bottom. What did it, OK? People will say, well, the economy has improved but that's part of the response to the market. Nobody knows what did it.

VELSHI: What actually was it? Because I would love to know why the S&P is 30 percent higher than it was on March 9th and how we turned from saying the Obama administration was doing a terrible job at this to all of a sudden deciding that they've been spearheading confidence in this market. What is it?

ROMANS: Could it be that we're just tired of being negative and our psychology and our will changed and so then the circumstances change?

SHILLER: Yeah, Christine, this is absolutely right. You said that kind of hesitantly like, could that be right? That is right. That's because there's internal and mental dynamic ultimately. Ultimately, we're responding to each other and some of us are perfectly rational to stop spending when we're out of a job and that sort of thing.

But underlying driving it are these mental processes and part of it is that, yeah, we think it's gone on long enough and we look at each other and we think maybe we're getting a little more optimistic and that's what people are focusing on. We're looking at each other and trying to judge each other's psychology.

VELSHI: All right. Bob here's the problem, though, we started this recession with an unemployment rate of 4.9 percent and not even the most optimistic of economists and you don't fall into that category anyway and we think that this unemployment rate is going anywhere, but higher and that we're not going to lose, at least a million more jobs. How does that factor into the animal spirit?

SHILLER: Well, we've seen a lot of recessions come and go and people expect them to end because they usually do end in less than a couple of years, but this is an unusual recession. It's the worst one since the great depression. People really don't know what to expect now. We've gotten a real lift lately, but I worry that these kinds of lifts have often been short lived, and I worry that it is going to -- the damage has been so severe and we see things unfolding like these auto dealerships are shut down. So there will be something in a month and there will be something in three months. This burst of confidence will hold is not at all assured.

ROMANS: Robert Shiller, co-author of "Animal Spirits." Also the author of, thank you so much. Come back again soon. I love the idea of us being able to will ourselves out of this, but I also know that there are a lot of things going on here. Robert Shiller, Co-Author of "Animal Spirits" and the auth.

What you can't rule yourselves out of is a lack of a job. We have people come on TV and say things like have a good attitude and have good job karma. You can't have good job karma if 15,000 people are laid off.

VELSHI: A can't willing is a good idea to think as positively as you can about it. How much say should the government have over how they do business?

ROMANS: That is right. VELSHI: We have people who come on TV and say, have a good attitude and good job karma; you can't have good job karma if 15,000 at your company are laid off.

ROMANS: That doesn't override the animal spirits. In Boston who are firing people.

VELSHI: I think it is a good idea to act responsibly if you can about it.

Listen, your tax dollars are bailing out some of our nations banks, so how much say should the government have over how they do business?

(COMMERCIAL BREAK)

VELSHI: Well, the billions of dollars in bank bailouts, sparking questions about how much say the government should have over how the nations banks are run.

ROMANS: In other words should the government be able to limit executive pay? Should they be able to tell these banks what to do?

VELSHI: Or who runs them.

ROMANS: We know we own them, right? CNN's Susan Lisovicz addresses this issue in her exclusive interview with Citigroup's chairman Dick Parson, to whom we should also know is the former CEO of Timer Warner the parent of CNN.

Hello there, Susan. A view from the top from the Citigroup chairman and what did he say about just how active the government is being in the daily running of Citigroup?

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Well, let's talk about, you know, where we are right now, Christine. I mean, it seems like the triage part of the financial industry is over and now, yeah, there's a real fear about regulation. We've gotten through stress test.

The financial stocks seem to be stabilizing, so I asked him, you know financial regulation is coming. What can't you live with? And he said executive compensation, listen to his explanation why.

(BEGIN VIDEO CLIP)

RICHARD PARSONS, CHAIRMAN, CITIGROUP: Too much regulation in that space, I think it is going to be perishes. I just don't see, I can understand how people will feel better in the short term about, well, we got those guys, but in the long term it's going to -- it is going to disadvantage our system on a global basis as against the rest of the world, not a smart thing to do, in my judgment.

(END VIDEO CLIP)

LISOVICZ: One of the reasons why is that he said, talent goes to the best offer. Believe it or not, we still have a capitalist society here and there are plenty of, for instance, international firms that will poach the talent because they will not be found.

VELSHI: I get that point. I get that point and I think Dick Parsons is a great administrator and I hope he does a good job at Citi, but the reality is there are a lot of Americans who sit there and say really? This is the talent we are going to lose if we don't pay them lots of money?

LISOVICZ: It is a legitimate question. Believe me I asked it and he said you could make the argument, this talent, quote, unquote, got us into this mess in the first place. There have been a lot of excess. Everybody knows it, there has been excess in all levels certainly including Wall Street, but the fact is you still need people to run these organizations and they will pay more especially if they're not bound by the same restrictions.

But on that point he said it's not what he is seeing and he says he's on the phone with regulators quite a bit. He said that, you know, it's not the same situation as GM where the government did push Rick Waggoner out and is expected to name seats on the board of directors. Listen to what he said about how the government is handling Citigroup.

(BEGIN VIDEO CLIP)

PARSONS: With the exception of the cloud that has been cast in the space, there's been very little direct involvement, very little direct involvement by the government in the affairs of this institution.

(END VIDEO CLIP)

LISOVICZ: But you know having said that, Citigroup has received $45 billion from taxpayer money. So I think that, yeah, that's why Dick Parsons says he's on the phone quite a bit with banking regulators.

VELSHI: He certainly has a firm hand on the tiller when you bought most of the farm.

LISOVICZ: No question about it.

ROMANS: I do think though that the next step in this entire fight between Wall Street and Washington, quite frankly, is going to be whether outside of the banks and the financial institutions who have received government money, if we're going to be talking about government regulators setting pay scales for all of the financial industry and that's something being considered and that takes it to a new level from just the cloud of compensation over someone like Citi which has a bunch of government money to everybody.

LISOVICZ: And you know what? I think hopefully the financial industry gets it that, you know these outrageous awards and bonuses, compensation, that the best thing they can do is rein it in themselves because once you have the government come in, look, the government is pretty busy these days. It's best if you do it yourselves and show that you've kind of learned a lesson. People are upset.

VELSHI: Susan, good to see you. Thanks very much.

LISOVICZ: Likewise.

ROMANS: All right. Four out of five of this year's college graduates are without a job offer right now, but grab a pen and paper; we're going to tell you exactly what to do to land that first job and whether or not you can wear the nose ring to the interview.

(COMMERCIAL BREAK)

ROMANS: You know, Ali, we're raised in this country to believe you need to get an education, you need to have a college degree and it is a buffer against unemployment and something that will help you get ahead in this job market, however nothing is guaranteed.

VELSHI: However, the unemployment rate in this country is 8.9 percent. The unemployment rate for college grads is nearly half of that, less than 5 percent. The unemployment rate for people without a college degree is above the national average, but there is evidence that even those people receiving a diploma this month are having trouble landing their first job.

ROMANS: That's right. Gosh, all you guys out there with the caps and gowns.

ROMANS: Crash course in finding, landing and keeping your first real job. I don't know my idea is at 8.9 percent unemployment the nose ring probably -- the nose ring, the tattoos and the risque status and photo on Facebook probably ...

VELSHI: With all due respect for all of the time I've known you, you would have never thought that the tattoos, the nose ring and the risque photos would have been appropriate. You may need to recluse yourself.

ROMANS: I'm a little conservative. I'm sure that there are companies that do want to hire people that are edgy and creative, which I am not.

VELSHI: What do you think?

ROMANS: What do you think?

ELLEN GORDON REEVES, AUTHOR, "CAN I WEAR MY NOSE RING TO THE INTERVIEW:" People say no, but I say yes, you have to know yourself, you have to know the company culture, so it's really about to thy own self be true but really understand where you are applying. It doesn't fly in every single company.

VELSHI: Let's talk about some of the mistakes that you might make. Again, with the caveat that you may be applying to a place that wants that particular edge and your particular connection to your demographic, but the mistakes that you think people run into right out of college looking for a job.

REEVES: Right, absolutely. The only thing is young people don't realize that everything is an act of self-presentation when you are job hunting. You're on display all of the time, you can't let your guard down for a minute. So from the time I call you for an interview, your cell phone, for example, it can't be answered, you, what's up and when I call you for an interview you can't say hey, dude. Everything must be professional from that to your e-mail address. I'm not going to hire dizzymissisy@gnails or hotmama@hotmail.

VELSHI: Let's talk about how you get around this. What do you do? There's a bit of a disconnect because we have a workforce out there that's very young but our nation's employers actually need to employ.

ROMANS: That are hip with good ideas.

VELSHI: You want to tap into that. You want to connect to that, you don't want everybody being stodgy and old farts like us.

REEVES: Young people have to realize that they really have to show not tell and they have to talk about what they've done in their recent college experience, creative ways that they've addressed whether it is course work or volunteer work or extra curricular and things they've done and they have to learn to talk about it in measurable and deliverable.

Everything has to be packaged as an anecdote and they have to tell stories and not just say I'm a great communicator. But say hey, I used Facebook and I raised $500 for our charity and our sorority or whatever it is that they've done and they have to tout their accomplishments and show that they do know how to use the technology, but in the right way.

VELSHI: Can I just pick up on that? You mentioned Facebook and we've discussed Facebook and social media and social networking as a way for people whether they're graduates or others who are laid off to connect to jobs. How do you feel about that?

REEVES: Facebook is a great way if you know how to use it right. A discreet posting that says look, I'd love to talk to someone in Time Warner. Does anyone know anyone, and I'd love to have an interview. That's the right way. The wrong way is to be posting pictures of yourself doing belly shots on a bar and it's not what you are doing on the weekend as long as it is not illegal. But what we care about is this shows an extreme lack of judgment that is the kind of thing that makes you say, I can't hire you and I can't trust you with clients.

ROMANS: How did you know about Ali's pictures on Facebook? How did you know? REEVES: I did my research.

VELSHI: There you go.

REEVES: This is what I tell them to do. You have to Google, Google, Google.

VELSHI: And employers will do that and there's a lot of dispute about whether or not employers or colleges should be looking into your private business on what some people think is their private business on Facebook or on MySpace, but the reality is it does happen.

REEVES: No, it's not private space anymore that is the problem. People have to realize Facebook, MySpace, they have become professional spaces and you've got to clean up your online act.

ROMANS: When I graduated from college, when I was told that you wear navy blue suit with a white shirt, nothing too short, nothing too fancy, be professional, now I think that I wouldn't recommend somebody wear a navy blue suit and nothing too short.

VELSHI: I think that is the issue. How do you show that you're edgy, and interesting and a new and modern.

ROMANS: Without having a tattoo on your forehead.

VELSHI: Without offending.

REEVES: It is a situation and you have to show up in interview in appropriate clothes. I had a kid show up for an interview for a big magazine in shorts and flip-flops and the explanation was its summer in D.C., that's not right. Even if you want to be a life guard you don't show up in a bathing suit at a country club or a pool.

So you have to respect the situation. You want to wear an interesting piece of jewelry, if you are a guy have an interesting but not crazy tie, something that will spark conversation and show that you've got a sense of humor and an attitude, but again, respect the situation of the interview.

ROMANS: An interesting piece of jewelry.

VELSHI: That's great.

ROMANS: A graduation gift, mom and dad.

VELSHI: Job jewelry. What a great conversation. Thank you so much for being with us. Ellen Gordon Reeves is the author of "Can I Wear My Nose Ring to the Interview" which would cause me to buy the book just because of the title.

ROMANS: A lot of you have been e-mailing us about gas prices. Worried about a repeat of last year's of last years $4 a gallon. We're going to tell you exactly what to expect with Memorial Day weekend just one week away.

(COMMERCIAL BREAK)

VELSHI: It's understandable that people might want to bury their heads in the sand and not deal with the reality of this economy, but we know that you do because you tune in to us. Tune in for Christine and me at 8:00 Eastern tonight for the CNN Money Summit "Money and Main Street" where we're connecting some of the larger trends that are going on in the business world, in the world of money with some communities across the United States where they're experiencing things like foreclosure and job loss and dealing with some of the struggles that you're dealing with.

It's a fun hour with Anderson Cooper. We've got these communities all across America and some of the brightest minds in business helping to make sense of it all. I think it will help you make some choices.

ROMANS: It's an informative hour and it is going to really shed light on what's happening and where we're going from here which is what we all want to know.

VELSHI: "Money and Main Street" tonight at 8:00 p.m. Eastern on CNN.

ROMANS: 55,000 struggling home owners now have lower cost mortgages thanks to the government making homes affordable plan. It's a start, although the economy is weak, companies are shedding jobs and many homeowners are upside down on their mortgage. Frankly, only a small number of those who need a new loan actually qualify and the Obama administration this week announced plans to make it easier for a short sale or to simply turn over your home to a lender and not ruin your credit, both of those options to avoid foreclosure but you will still lose the house.

Will it stem the foreclosure crises? Too soon to tell. One in every 374 U.S. households filed for foreclosure last month. Think about the highest rate since Realty Trac began keeping these records four years ago. One in 347 households getting some form of foreclosure notice that could be the default notice in the beginning or the actual padlock. I worked it out, 243 homes every single day getting the padlock on the front door.

VELSHI: That's the end of the process. Listen another casualty of the recession, Social Security funds are drying up faster than expected. Social Security will run dry by 2037, that's four years earlier than estimated last year. Medicare is even worse.

It's expected to run out of money eight years from now and that's two years earlier than expected and more people are drawing on the benefits and at the very same time fewer people are actually working and contributing to the fund. The trust fund reflects 2.4 are you sitting down for this? Trillion dollar surplus that is paid into Social Security over 20 years that Uncle Sam has borrowed.

ROMANS: Already spent.

VELSHI: And promised to pay back. We hope they do. Those that describe the Social Security situation as a crisis point to 2016 as a critical date because that's when the government has to start paying the system back with interest. So let's hope our economy is back on track.

ROMANS: So is it a crisis right now? Is it a crises in 30 years I think the bottom line, for the next 30 years or so you're going to get your full benefits for younger workers.

VELSHI: For those of us -- you need to not think of Social Security as your retirement income.

ROMANS: I always say it's the gravy and not the meal.

VELSHI: You need to plan for your retirement income with an IRA, with a 401(k) and regular savings and think about it that way.

ROMANS: Right.

VELSHI: Some say it's a crises now and some say it will be a much more serious crises if we don't deal with it any time soon.

ROMANS: It's the original ticking time bomb before the time bomb went off. Ali, I've been getting e-mails from viewers all fired up about rising gas prices.

VELSHI: Up about 40 percent this year alone.

ROMANS: And they rose 12 percent in just three weeks. So are we going to see a return of $4.00 a gallon gas this year? Every one is asking me. You're forgiven for being so worried about it because it happened very quickly last year and a lot of conspiracy theories in the e-mails about what's going on the speculators driving this out of control.

VELSHI: Look, first of all, speculation, which really got a bad name in commodities last year is kind of how the market runs. Someone has to take a risk, and to invest their money in the hopes that they will make more money. While we talk about this economy starting to come back, there are some people who buy commodities including oil who say if the economy comes back, people will use more oil, it's driven the price of oil up to close to $60 a barrel and gas prices have gone up a lot. You may not like speculation and you can think it's terrible, we can debate that, it's not an on conspiracy.

ROMANS: And let's be sure that nobody I talked to, none of the people who follow these markets say that we're going to see $4 a gallon.

VELSHI: Again soon. There are some people who think you could see $4.00 gas again, but want quickly.

ROMANS: We have a segment we've been working on.

VELSHI: I have seen it.

ROMANS: It's called "Roman's Numeral."

VELSHI: I don't know why it took so long to pick it out.

ROMANS: The bosses thought of it. Look at that is actually a roman numeral. You know what number that is?

VELSHI: 1,000.

ROMANS: It's 46.

VELSHI: I missed that day in school.

ROMANS: Here's the significance of that number. What do you think it stands for?

VELSHI: 46.

ROMANS: It has to do with how much money borrowed how much money we spent in out budget deficit. The U.S. borrows 46 cents for every dollar it spends. 46 cents for every dollar we spend is borrowed and why is it important this week? The White House said this week that our budget deficit will now be 1.8 trillion dollars.

VELSHI: In a perfect world you don't borrow money to spend it. Every dollar you spend is money that you have.

ROMANS: You can borrow a bit of money; it is OK to borrow - when you are borrowing 12.9 percent of the size of the economy that starts to become a problem.

VELSHI: So on a personal level it is OK to borrow to buy a house because the reality is if we saved up the money for a house to live in, we'd be 86 years old. Some things are good to borrow for and some amounts are OK, but 46 cents on every dollar seems to a little high.

ROMANS: Don't you think it's a little high?

VELSHI: That's interesting.

ROMANS: Interesting, but not high. You're thinking maybe we can maybe we can afford that.

VELSHI: Until we do Velshi's numerals I have to do the math on it.

You think it's high. You've always thought that I have a bit of a spend thrift way.

ROMANS: That's why we're a good balance.

VELSHI: How do you transition into a job that you'd absolutely love to do?

Right now everybody's worried about getting a job of some sort or making sure they have their own, but imagine having your dream job and getting paid to do what you actually love doing which is kind of what we sometimes think we get to do. ROMANS: We get paid for doing what we love to do but it's not something that everybody in the workforce gets and now they're reevaluating what they do and how to make money doing what you like. Gary Vaynerchuk his glass is half full. He grew his love for wine into a booming business. He's the host of Winelibrarytv.com and the author of the fourth coming book "Crush It," turn your passion into profit in a digital world.

VELSHI: By the way, you got a book deal for ten books with Harper Studios. Tell us what we're talking about here.

VELSHI: We can start with that. You are by definition, a phenomenon. What exactly is going on? Why are people following you? What are you telling them?

VAYNERCHUK: I care. The people need to understand is the way we communicate today is so different and the platforms have been redefined. I was a wine shop owner in New Jersey, had a passion about wine, took a camera and started putting it out there and started putting it out there and just hustled, worked every day and answered every e-mail.

VELSHI: Initially, were wine questions and questions about wine.

VAYNERCHUK: Absolutely. The first two years I didn't really play my business card until late '07 about how I did it. Everybody thought I was crazy and ate dirt with Conan O'Brien and that's how it happened, but at the end of the day what I realize what I saw in late '05 was that the world completely changed. Marketing has changed and personal brand has changed and it's a two-way conversation now, Ali. It's not just that we dictate. People want to interact and I interact a lot.

ROMANS: You're on the leading edge of that and people are getting through the traditional forms of media because they want to get the information that they want you're giving it to them.

VAYNERCHUK: The brands and celebrities and their products. You think its hard explaining Twitter today. I've been using it since '06.

VELSHI: Wow! Can you explain it? We're both on Twitter as you are, but we don't have nearly the following you have.

VAYNERCHUK: I don't do it as frequently as I should. If you're doing it you are having short conversation and it's a running thought in your head, to the people who want to hear what you have to say.

VAYNERCHUCK: Here's what it really is, it's word of mouth on steroids. It's the fact that you can put something out there and the people that care about that, if it's quality. Confidence is always king. If it's quality it gets expanded in so many directions and that's the real power of it. Everyone now has a voice; it's not just certain, select few.

VELSHI: Someone said to me, treat it like a bit of a give and take. If you were in a cocktail party and you did all of the talking and it was just a pitch and just you, people will get a sense of that. Invite others in, read tweet or send it out on Facebook other interesting things that you learned that you though the people who are your friends might want to know about.

VAYNERCHUCK: You know where that started wrong? Somebody told me. Just do it, if you come from the heart and you treat it as a real product not like how will I use it? How to game it and how to use it. That is just the total wrong approach. Use it to communicate, that's what people like. Game over.

ROMANS: How do you turn it into something that's going to make you live your dream and make money?

VAYNERCHUCK: That's where it shifts. I believe everybody needs a platform, a home base. My home base lives online. Yours live on television. You may be a written word. You may not be an extrovert. If you put out quality content and use things like Twitter and Facebook to shake people's hands, to bring them to your content, all of a sudden you have eyeballs. Let's be very honest, the confusion of how Twitter and Facebook are going to make money is silliness. If you don't understand that eyeballs turns into cash, then you don't understand business.

ROMANS: And people like you figuring out how to reach out -- that's a business opportunity for a lot of people.

VELSHI: Here's my question. How far does this conversation go? This is a very interesting conversation. You're going to write ten books. How far do you go again?

VAYNERCHUK: Maybe the first questions in the first book, the other nine won't matter. Here's really is the shift. Traditional people that have been in business for a long time, whether personal brands or products, can't wrap their head around the fact that they don't control the message of the brand anymore. Ali, your fans control the message.

VELSHI: That's right.

VAYNERCHUK: They're the ones talking about it and the way you respond to them is the game, not what you tell them.

VELSHI: So what does that mean? Does that mean the idea is you're listening as much as you're feeding out there?

VAYNERCHUK: No. The idea is you are listening all the time.

ROMANS: What does a wine guy from New Jersey to now a leading- edge thinker on content and business development? VELSHI: And a phenomenon.

VAYNERCHUK: I want to buy the New York Jets. I don't really think about what's happening right now. I think about where I'm going. By the way, that's a big fact to notice. It's not about what's happening right now. Twitter and Facebook are tools. Twitter and Facebook are markers and crayons. They're a fax machine. It's the fact we're changing and the platform, the internet -- the internet that we know is 14 years old. People are underestimating how powerful the global platform is.

VELSHI: This is fantastic. This is very exciting. And when you're out tweeting, just ask a few people to join us.

VAYNERCHUK: You got it.

VELSHI: You and I are going to have to kick it up on Twitter. I'm embarrassed after this.

ROMANS: Tell us how to kick it up a little bit.

VELSHI: After this discussion, we're going to tweet. What are we telling?

VAYNERCHUK: Once again, you're missing the point. I'm not joking. Go to search. Twitter and search your names. See what people want from you and give it to them. Ali, what's your favorite sport? Soccer. I don't know. But that's what you want.

VELSHI: I was waiting for a second joke since I'm Canadian.

VAYNERCHUK: They don't want you to tell them. They want you to interact.

VELSHI: All right. We're going to do it. That's our work for today. We're going to be answering a lot of questions for you.

ROMANS: This man changed my life.

VELSHI: Fascinating.

Best of luck. We will follow what you're doing. Gary Vaynerchuk is the host of Winelibrary tv.com and he is -- How do we get you on Twitter?

VAYNERCHUK: Garrvee. Lots of es.

ROMANS: It takes a lot to get people to follow you on Twitter. You're saying something people want to hear.

VAYNERCHUK: I have the chops. I'm not scared. I really know what I'm doing; I'm consulting for Fortune 500 companies. This is not a joke. People don't get it. They want to make fun of it. This game is changing. If you're not on board, you're going to lose.

VELSHI: Thanks, Gary. ROMANS: Babies everywhere. The worse the economy gets, the more babies. We're obsessed with the babies. Here's the twist, we're making people famous for having babies.

(COMMERCIAL BREAK)

VELSHI: Unless you're living under a rock, you've noticed that celebrity babies are in the spotlight.

ROMANS: Never before has pop culture seen so many famous people, and their offspring, in magazines, online, on TV. Is baby stargazing new recession escapism? Is it good business or both?

UNIDENTIFIED MALE: I think we've always been obsessed with celebrities. I think pregnancy for celebrity now is a new form of getting themselves on the cover of celebrity magazines, getting their buzz on the internet.

ROMANS: And we're eating it up. Call it escapism in an ugly recession. In magazines, on TV shows and Web sites like "People" Magazine's celebrity babies.com.

ULRICA WIHLBORG, ASSISTANT EDITOR, "PEOPLE" MAGAZINE: Celebrity magazines and TV shows have increased in such -- such a big boom just in terms of the amount of media that's out there. And people really want to be able to relate to celebrities and their babies.

ROMANS: Married, single, adoption, twins. It's a far cry from the days of old Hollywood when Ingrid Bergman was ostracized for having a child out of wedlock. When starlets and leading men tried to keep certain parts of their personal lives away from the flashbulbs.

DEENA WEINSTEIN, SOCIALOGIST, DEPAUL UNIVERSITY: Pregnancy was not seen as something that was glamorous and beautiful. And, of course, we know that that's changed since Annie Leibovitz's "Vanity Fair" picture of Demi Moore. That was wake-up call to this whole fascination.

ROMANS: There are the babies of the famous, and a new twist -- becoming famous for having babies. No question, babies sell. And a bad economy means working to attract as many eyeballs as possible. The sale of "Entertainment" Magazines fell in the second half of 2008. And that means, expect more babies.

(END VIDEOTAPE)

ROMANS: The worst the economy gets, the more babies we want to see apparently. The first celebrity baby, Ali, to grace the cover of a celebrity magazine was not Shiloh or Suri. It was little Ricky Ricardo and little Desi Arnaz, the son of Lucille Ball. He appeared on the cover back in 1953, and get this, he was born the year President Dwight Eisenhower was inaugurated that nearly eclipsed the president. This trend has been slowly building, building and now the economy has just cratered and boom on the cover of every magazine. This famous, beautiful rich baby.

VELSHI: I thought we were fascinated about it because we had more access and people were taking more pictures. But now that you're thinking about it, these stars are giving us something.

ROMANS: And maybe because they're getting paid a lot of money to do it, too. The rumor, the report is that the Brangelina brood the twins, $14 million for those pictures.

VELSHI: Wow. When can we expect pictures of yours?

ROMANS: I'm one of those people who keep them under wraps.

VELSHI: There we go. This is an interesting story. I didn't know about that. I didn't know you could make that much money having a baby.

ROMANS: There you go, Ali.

VELSHI: Thank you for joining us again for this week's YOUR MONEY. You can follow us, by the way, on Facebook and at Twitter. I'm at Ali Velshi and Christine is at Christine Romans.

ROMANS: And make sure you join us every week for YOUR MONEY. Saturdays 1:00 p.m. Eastern, Sundays at 3:00. Log on 24/7 at CNNMONEY.com. And also don't forget us tonight. 8:00 p.m.